In the simultaneous move labor negotiation game:
A)Neither party prefers bargaining hard in the Nash equilibrium
B)Both the parties want to end up in the least efficient outcome
C)Both parties bargain hard in the Nash equilibrium
D)Both parties want to stay in the prisoner's dilemma

Question

​In the simultaneous move labor negotiation game:
A)​Neither party prefers bargaining hard in the Nash equilibrium
B)Both the parties want to end up in the least efficient outcome
C)Both parties bargain hard in the Nash equilibrium
D)​Both parties want to stay in the prisoner's dilemma

Quizplus · Accepted Answer

Both parties bargain hard in the Nash equilibrium because they want to maximize their payoffs. Bargaining hard can lead to a better outcome for the party if the other party also chooses to bargain hard. This creates a Nash equilibrium where neither party has an incentive to deviate from their strategy.

​In the Simultaneous Move Labor Negotiation Game

In the Simultaneous Move Labor Negotiation Game